Seadrill Takes Bigger Slice of Scorpion

Seadrill has today, through market transactions, acquired 1.3 million shares in Scorpion Offshore Limited. The shares have been acquired at a price of NOK36.00 per share.

Seadrill is, following this acquisition, the owner of 35,938,903 shares in Scorpion representing a total of 40.1% of Scorpion's issued shares.

The acquisition triggers an obligation on Seadrill to make a mandatory cash offer for Scorpion's remaining shares or to reduce its holding below the 40% threshold within four weeks from today.

Seadrill has decided to make a cash offer for the remaining shares in Scorpion.

Seadrill is prepared, subsequent to the offer, to be owner of anything between 40.1% and 100% of Scorpion.

Seadrill views their holding in Scorpion as a long term, strategic investment and will, as a consequence of the increase of its shareholding, request a shareholder meeting in Scorpion for the purpose of electing a board that, to a larger extent than today, reflects the ownership structure of Scorpion. Seadrill will, in addition, put forward a proposal to Scorpion to enter into an arm's length management contract with Seadrill Management AS with the target of reducing rig operating and overhead costs in Scorpion.

The Board of Seadrill further announces that Seadrill has entered into an option agreement with Jurong Shipyard to buy a high specification, harsh environment, jack-up rig of the CJ70 design which is presently under construction at the yard. The rig is expected to be delivered at the end of the first quarter of 2011. Seadrill is currently in final discussions with a charterer regarding a potential long term employment of the rig. In the event these discussions are successfully completed, Seadrill will exercise their option and purchase the rig.

In order to finance the Scorpion offer and the potential acquisition of the CJ70 design jack-up rig, Seadrill will, today, seek to issue up to 12,500,000 shares in a private placement. The issue is guaranteed by Seadrill's major shareholder Hemen Holding Ltd.

Carnegie ASA, Fearnleys Fonds ASA and Pareto Securities ASA will manage the placement with Nordea and DnB Markets as Co leads. The equity offering is expected to be completed before 0900 AM Oslo time, tomorrow April 13, 2010.

The Board's objective is to continue to grow Seadrill through the acquisition of modern, high specification, drilling units and thus further increase its capacity for long-term regular quarterly dividend payments.

The common shares of Seadrill will start trading on the New York Stock Exchange on Thursday April 15, 2010.